ISLAMABAD: The industrial sector grew 5.02 per cent in the outgoing fiscal year as opposed to the growth rate of 5.8pc recorded a year ago, according to Economic Survey 2016-17 released on Thursday.

It contributes 20.88pc to GDP and is a major source of tax revenues.

The sub-sector of manufacturing, with a share of 64.4pc in the industrial sector, registered the growth of 5.27pc in the outgoing fiscal year compared to 3.66pc a year ago.

The manufacturing sector is the backbone of Pakistan’s economy and constitutes the second largest sector. It consists mainly of large-scale manufacturing (LSM) that has a share of 80pc within manufacturing and 10.7pc in overall GDP. Small-scale manufacturing accounts for 1.8pc in GDP and 13.7pc within manufacturing.

LSM registered the growth of 4.93pc compared to 2.94pc last year.

Other components of the manufacturing sector include slaughtering, with a share of 6.74pc, and construction that has a share of 13.13pc.

Although the survey says the construction sector is displaying robust activities, it has registered a slowdown in growth over the preceding year.

The construction sector witnessed the growth of 9.05pc against 14.60pc a year ago. Industry players attributed the slowdown in growth to the tax dispute between the government and the realty sector that lingered for almost six months in the outgoing fiscal year.

However, infrastructure construction activities led to an increase in demand for steel and allied products, including the cement sector that recorded the growth of 7.19pc.

The survey also shows industry-specific data. Iron and steel products recorded the growth of 16.58pc in the outgoing fiscal compared to the negative growth of 7.48pc last year, textile 0.78pc against 0.66pc last year, electronics 15.24pc against the negative growth of 5.69pc last year, food, beverages and tobacco 9.65pc against 3.77pc last year, pharmaceuticals 8.74pc against 6.85pc last year, paper and board 5.08pc against the negative growth of 2.93pc last year, and engineering products 2.37pc against the negative growth of 14.04pc last year.

Sectors that showed a slowdown in growth included automobiles that expanded 11.31pc against 23.51pc last year, fertilisers 1.32pc against 15.92pc last year, rubber products 0.04pc against 9.17pc last year, non-metallic mineral products 7.11pc against 10.28pc last year, wood products -95.04pc against -58.09pc last year, leather products -17.97pc against 10.13pc last year, chemicals -2.20pc against 10.28pc last year, and coke and petroleum products -0.32pc against 2.40pc last year.

Small-scale manufacturing recorded the negative growth of 8.18pc. Other components of the industrial sector are mining and quarrying, gas distribution, and electricity generation and distribution.

Published in Dawn, May 26th, 2017